Surprise! UNC Student Health Insurance Doubles In Two Years

(WRAL) The University of North Carolina system requires all students to have health insurance coverage, but the cost of a plan the system offers has more than doubled in two years.

The insurance requirement started in 2010, and about one-third of students on the system’s 16 university campuses buy their policy through UNC’s provider, New York-based insurer Chartis. The rest of the students have other coverage, usually through their parents.

The average cost of the Chartis policy started at $695 a year, but it rose to $847 last year. Tuition bills that are now arriving in student mailboxes for the 2012-13 school year include a $1,418 health insurance premium.

Students with outside insurance can get a waiver to avoid the cost. And, here’s the kicker

Bruce Mallette, the UNC system’s vice president for academic and student affairs, blamed the increase on a high number of claims by students on the policy.

“It was a very affordable plan,” Mallette said. “If you look nationally, the pricing we had in the first two years was very, very competitive, and students utilized it and utilized it and utilized it.”

Boom! It was a very affordable plan and very generous with low to no copays (contraception was 100% free at campus health offices…do you think college students used the heck out of it?), and even those with a waiver stating they have other health insurance can take advantage of some the benefits of the Chartis insurance, such as….free contraception! And it is still a very affordable plan when comparing to the marketplace, but costs had to go up because it was being used way too much. Because it is generous in benefits, everyone has it, and it is easy to use. With such low copays (when there are copays) students will take advantage of it for every minor illness.

This highlights exactly what is wrong with Obamacare (well, one of the reasons): it causes people to have low responsibility since their costs, especially for health care, too low if not free, so it is used willy nilly, unlike a Health Savings Account, which makes people think about what they are spending. It’s been proven that people seek out care more often when the copays are low or free when they should simply go to the drug store and grab a bottle of cold or flu medicine. Seeing a doctor has real costs. People rush off to an emergency clinic or ER when they should go to the doctor, or simply the pharmacy. When people have to share the upfront costs more (in my old job, a single person had to pay $1,100 and family plan $2,400 out of pocket before copays for medical and prescription meds kicked in, but there was zero cost out of paycheck except what you might have wanted to put in the HSA) they tend to think about what they are doing. When it is cheap (or free) it will be used for every minor thing, which raises costs.

It’s not that everyone shouldn’t have health insurance: really, they should, so that everyone else doesn’t have to bear the burden. It’s that the costs have to managed in a judicious way so that the care is not abused, which drives up costs, along with what is covered.